NEW YORK ( TheStreet) -- ETF investors are moving beyond petroleum in the wake of the Gulf disaster, with natural gas funds such as First Trust ISE Revere Natural Gas ( FCG) leading the way.

Before the disaster in the Gulf, BP ( BP) was using its initials in a "Beyond Petroleum" marketing campaign that played up its push into renewable energy.

Now, in addition to the disaster in the Gulf, the company and its competitors are suffering from a decline in oil prices and difficulty in the alternative energy space, where European budget problems have hurt the heavily subsidized sector.

While energy ETFs are broadly lower in the past month, one bright spot is natural gas. Investors are becoming more optimistic after a rise in prices has lifted gas ETFs such as U.S. Natural Gas ( UNG) and U.S. 12 Month Natural Gas ( UNL).

I advise investors not to invest in these ETFs, since they track futures prices and suffer from contango, but UNL is superior to UNG if that's the route you want to take.

The natural gas explorers and producers are also moving higher, with FCG showing a small gain in the past month, versus losses for a whole host of oil ETFs such as iShares Dow Jones U.S. Energy ( IYE). One fund doing better than the oil group of ETFs, but behind FCG, is the natural gas heavy iShares Dow Jones U.S. Oil & Gas Exploration & Production ( IEO).

Individual investors aren't the only ones bidding up natural gas assets. Royal Dutch Shell ( RD) spent $4.7 billion at the end of May to purchase a private Pennsylvania firm with shale gas properties. One of the investors in that firm was KKR, and it's rolling over its profits into another shale gas play in southern Texas.

Producers are stepping up production as well, with Baker Hughes ( BHI) reporting an increase in the rig count.

In addition to the improvement in natural gas prices and the value of assets in the sector, the political climate may also improve. Natural gas has a number of features that make it favorable as a political issue.

For environmentalists, it emits less carbon than oil and coal, and after the BP disaster, it's a plus that gas is mainly obtained via land drilling. There's some concern about potential ground water contamination from the fracking techniques used in shale gas drilling, but oil and coal extraction are not without their own problems.

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